China's Deflationary Fiscal Policy During The Study

The Chinese government carried out positive fiscal policy in 1998, which was helpful to overcome Asia finance crisis and keep the speed of economic growth. But it leads to deficit financing and national debt. As lots of recessive debts become visible, the issues of fiscal risk become topic of conversation. Besides as the government enlarges its investment, whether positive fiscal policy would lead to "screw out" evoke scholar s discussion. We precede practical research on the effect of positive fiscal policy in this article.On the base of deflation theories, we provide our definition of deflation and classify deflation into a few kinds. According to mechanism of deflation, we sum up different theories and discuss the effect of deflation on consumption and investment. Aiming at the issue of deflation management, we induce some experiences that we can use for reference including the judgment of deflation and so on. As far as the methods of deflation management of china are concerned, we mainly analyze the state of affairs of deflation in 1997-1998 and the mischief of that. On base of that, we come up with positive fiscal policy and concrete measures of it. Next we focus on the effect of positive fiscal policy. It turns out that there is no apparent "screwing out". On the conditions of economic development at present, the viewpoint of reducing tax is not appropriate.Analyzing risk effect of positive fiscal policy, we classify finance risks into four kinds. At present, the risks the government faces include risk of debt cumulating, risk of efficiency loss, risk of inflation and so on. The fundamental rules guarding against finance risks are discussed in this part. The key point of guarding against finance risks is recessive risk.At last, we study the adjustment of positive fiscal policy. The state of macroscopic economic affairs had undertaken great changes since 2003. as economic growth come into ascent stage of a new circulation, deep levels issue in economy are emerging. On conditions of that, the government chose safe fiscal policy as its main measure in 2005. We discuss the meaning of safe fiscal policy, and render an account of concrete measures those should be carried out.